Using NCCP’s Family Resource Simulator to Improve Policies for Low-Income Families Nancy K. Cauthen, PhD Acting Deputy Director NGA Center for Best Practices: Annual Retreat for Governors’ Human Services Policy Advisors June 14, 2005
Who We Are NCCP is a nonpartisan research and policy organization at Columbia University. We use research to identify strategies to reduce child poverty and to improve the lives of low-income families and their children. National Center for Children in Poverty
NCCP’s Family Resource Simulator Why We Developed the FRS In the late 1990s, there was an increased focus on issues facing low-income working families…
Why We Developed the FRS (cont.) More research about the inadequacy of the official poverty measure and what it actually takes to make ends meet. –WOW’s Self-Sufficiency Standards –EPI’s Basic Family Budgets NCCP’s Family Resource Simulator
Why We Developed the FRS (cont.) More research on policies that encourage and reward work (e.g., EITC, child care subsidies). Concern that cliff effects and high marginal tax rates mean that working more does not always improve a family’s financial well-being. NCCP’s Family Resource Simulator
Why We Developed the FRS (cont.) Our Questions: 1.How do public benefits impact the ability of families to make ends meet as their earnings increase? 2.How well do existing policies—and combinations of policies—reward employment? How could they be improved? NCCP’s Family Resource Simulator
What the FRS Is An interactive, web-based tool that shows the aggregate impact of federal, state, and local policies on family resources and expenses as earnings increase. NCCP’s Family Resource Simulator
What the FRS Does It demonstrates the interaction of: Earnings Public benefits (cash and in-kind) Taxes Basic expenses NCCP’s Family Resource Simulator
NCCP’s Family Resource Simulator Includes These Public Benefits Child care subsidies Food stamps Public health insurance Section 8 housing vouchers TANF cash assistance
NCCP’s Family Resource Simulator Includes These Tax Policies Federal, state, and local income taxes Federal income tax credits (EITC, child/dependent care credit, child tax credit) State and local income tax credits Federal payroll taxes
NCCP’s Family Resource Simulator Includes These Expenses Child care Food Health insurance Housing Transportation Other necessities
NCCP’s Family Resource Simulator How the FRS Works The user creates a hypothetical family. Makes choices about: City and state Family characteristics Child support income Assets Debts
NCCP’s Family Resource Simulator How the FRS Works (cont.) The user also: Selects which public benefits the family receives when eligible. Makes choices about family expenses—including what happens when the family loses benefits.
How the FRS Can Be Used 1.To calculate the level of resources available to families as earnings and public benefit receipt change. NCCP’s Family Resource Simulator
Hartford, CT: Single-Parent Family of 3 Receiving All Benefits
Boston, MA: Single-Parent Family of 3 Receiving All Benefits
How the FRS Can Be Used (cont.) 2.To determine how much parents need to earn to cover basic expenses, taking public benefits into account. NCCP’s Family Resource Simulator
Atlanta, GA: Two-Parent Family of 4 Receiving Food Stamps, Public Health Insurance, Federal Tax Credits
How the FRS Can Be Used (cont.) 3.To illustrate how well state policies encourage and reward employment and to indicate where improvements are needed. NCCP’s Family Resource Simulator
Chicago, IL: Single-Parent Family of 3 Receiving All Benefits Except Housing Vouchers
Baltimore, MD: Two-Parent Family of 4 Receiving Food Stamps, Public Health Insurance, Federal Tax Credits
States Available at Alabama Illinois Connecticut Maryland Delaware Massachusetts District of Columbia Pennsylvania Georgia NCCP’s Family Resource Simulator
States in Progress New York Texas The Family Resource Simulator has been generously funded by the Annie E. Casey Foundation. NCCP’s Family Resource Simulator